Monday, July 30, 2012

(1 min Video) Top Banker Introductions Too Big to Fail

HBO had made a TV special on the book Too Big To Fail. Lots of fun parts in the movie, but I liked this dramatic quick introduction to a few of the CEOs.

Tuesday, July 24, 2012

(youtube audio clip) Angelo Mozilo's defense of Countrywide

For the uber financial nerd (UFN) out there -- there are dozens of interviews done by the Financial Crisis Inquiry Commission that can be found on Stanford's site (here).  There are plenty of interviews for UFNs: Buffett, Chanos, Einhorn and Burry.  Yet, I like to focus on one done by Angelo Mozilo today. For anyone who has followed Bank of America's turnaround, they know it's a pretty good business (large, stable, inexpensive deposit base) that is sitting on a toxic-clean-up-site called "Countrywide."

I thought it would be interesting to hear what Mozilo had to say since he was the former CEO and co-founder of the company. I wasn't let seems Mozilo had huge delusions of how great Countrywide was and/or he was really full of it.

In the interview he says...

1.) Countrywide's stock had a much better performance than Warren Buffett's Berkshire Hathway. (This is true'ish, if you don't consider it would have been a giant zero if Bank of America didn't buy it.)
2.) Boasted that Countrywide's creditors were payed in full. (Which wouldn't have been like if  it wasn't for Bank of America)
3.) Countrywide didn't take any TARP (Bank of America needed to...)
4.) Thinks it's unfair Countrywide is put int he same class of Bear Stearns, Lehman Brothers, AIG, Wachovia, Fannie Mae because these companies went under and Countrywide didn't. (Countrywide would have if it wasn't for Bank of America....)

Bank of America doesn't get enough credit for cleaning up the giant mess left behind by Countrywide.

Sunday, July 15, 2012

The Apple Inc Turnaround 3 Steve Jobs Videos: impressive to see Steve Job's thought process

Here are three videos that show the turnaround at Apple Inc. The first video is before he is CEO, the second video is when he was named iCEO and brought in new board members, and the third video is when they show steady profits and show their strategy "Apple Hierarchy of Skepticism"

1.) Apple's  WWDC 1997 -- Steve Job's taking questions. He shows a lot of maturity and a firm grasp of Apple's problems.  Tells the audience to buy Apple stock when the media writes bad articles on Apple.

2.) Macworld Boston 1997. Steve Jobs comes back as the interim CEO and changes up the board of directors. One of the board of directors talks about turning around Citicorp in the early 1990s and seeing a huge rise in the stock price by focusing on the fundamentals (time 15:50)

3.) Macworld July 1998
Steve Jobs introduces his "Apple Hierarchy of Skepticism" survival, stable business, product strategy, product strategy, applications and growth.  This is the general playbook for any turnaround and it is beautiful to see it.

Quick thoughts on turnarounds. (1) Successful turnarounds have a huge survivor bias.  Obviously the turnarounds that people read about are mostly the ones that survive to keep on producing 10-K files for all us. If Apple died before Steve Jobs or if Microsoft never invested into Apple, maybe Apple wouldn't have survived.   (2) That being said on survivor bias, successful turnarounds generally have managers who are in it because their ego is in it. They aren't looking to get rich and are usually able work without profit or relatively little profit for a good period of time. Being a founder because their ego is involved with the company, but it can't be involved too much because you have to practical to make hard decisions during a turnaround (firing people, cancelling divisions/products)

I hope you enjoyed the videos.